Anger Makes Firms Wary

State Businesses In China Take Precautions

May 11, 1999|By BARBARA A. NAGY; Courant Staff Writer

Connecticut businesses with operations in China said they were ``taking precautions'' because of anti-U.S. demonstrations in Beijing, Taipei and other cities, but reported no problems at their overseas plants as of Monday.

Meanwhile, trade consultants said NATO's bombing of the Chinese embassy in Belgrade -- the attack that precipitated the protests -- probably would have only a short-term effect on business ties between the United States and China.

``It's a blip. It's a very significant blip,'' said Thomas Gutteridge, dean of the University of Connecticut's school of business. ``It all depends on how we handle it, and at their end how they want to handle it.''

Connecticut's exports to China last year fell dramatically, probably because of the Asian financial crisis, according to the state. Exports to China totaled $52.8 million, down 23.6 percent from 1997. Exports to Hong Kong were $91.7 million, down 35.5 percent.

The situation in Belgrade is unfolding as Asia's economic crisis eases, something that normally would create new opportunities for U.S. business.

Gutteridge expects that U.S. companies will feel the fallout for perhaps a month or two. Smaller businesses might find it harder to win approval for operations or trade, he said, but larger companies with established ties probably won't notice any change in relations.

Edward J. Stockton, a Hartford economics consultant who specializes in Asian trade, said U.S. trade is too important to the Chinese for the attack to result in any real harm -- as long as China is satisfied with U.S. apologies and reparations.

``I can't believe this is actually going to amount to much,'' he said. ``I think it's all going to be over in a week.''

Still, the U.S. State Department Monday urged U.S. citizens to defer nonessential travel to China. Several local companies said they were taking precautions to protect employees and plants, but for security reasons declined to elaborate.

``We're being very cautious,'' said Mark Sullivan, a spokesman for East Hartford-based jet-engine manufacturer Pratt & Whitney. He wouldn't say how many employees Pratt has in China or discuss operations there. ``We don't want to draw attention to it,'' he said.

Pratt is a division of Hartford's United Technologies Corp., one of the state's most aggressive investors in Asia. Spokesman Peter Murphy, just back from a trip to Asia that included a stop in Beijing, declined to comment on UTC's response to the situation in China.

Wes Todd, a spokesman at Hartford-based Loctite, said officials there haven't heard of any problems at their operations in China. At Otis Elevator Co. in Farmington, spokesman Matt Broder also said no disruptions had been reported. Otis has 6,000 employees and two factories in China.

Aetna Inc., which has more than 700 employees at a joint venture in Shanghai, is monitoring the situation, but ``we don't believe our people are at risk'' because they are native Chinese, company spokeswoman Patricia Seif said.

No additional security has been added at the offices, and ``we remain committed to pursuing our business interests in China,'' Seif said. The joint venture with China Pacific Insurance Co., called Pacific Aetna Life Insurance Co., started selling life insurance earlier this year.

Both UConn and Central Connecticut State University are building ties to China, offering courses and services aimed at the Chinese and U.S. business people. Gutteridge just returned from a trip to China, and is expecting a visit from a Chinese delegation next week.

At CCSU, spokesman Peter Kilduff said the head of the university's Center for International Education is in China on business, but is an experienced traveler and fluent in five languages. ``We're trying to track him down,'' Kilduff said. ``At this point, there doesn't seem to be much that we have to worry about.''

Gutteridge said he could understand the outrage in China.

``We killed their people,'' he said. ``We goofed, and we goofed big time. Just think if the shoe was on the other foot.''